Rich Dad Poor Dad

"In school, we learn that mistakes are bad, and we are punished for making them. Yet, if you look at the way humans are designed to learn, we learn by making mistakes" - Robert T. Kiyosaki


The Importance of Financial Literacy


Robert T. Kiyosaki’s Rich Dad Poor Dad” has changed the way many people think about how to approach their work lifestyle. Kiyosaki is a strong believer that an individual should make their money work for them, instead of working all day, to achieve financial stability. His book revolves around this concept, and how the school system fails to teach students about investing and money.

Passive vs. Active Income

"If you do not find a way to make money while you sleep, you will work until you die" - Warren Buffet

Robert’s story works on the life of a kid who experiences the fatherhood of two different “dads”, a wealthy one and another who is not wealthy. One of the dads is a high school drop-out who learned how to make investments and money work for him through real estate mostly. The other one is a college-educated father who works every day at an office and lives a stable life, but with not many luxuries.


Robert’s big statement is to get out of the rat race. What this means is to take advantage of opportunities and investments to be able to create passive incomes. Being an employee is a short-term solution to a long-term problem according to him.


Knowledge, The Most Valuable Payment

"Workers work hard enough to not be fired, and owners pay just enough so that workers won't quit" - Robert T. Kiyosaki

The first lesson provided in the book is that leaving a job only because you are not being financially paid enough might not be the best choice. The best option would be to use your work as an opportunity to learn something new. Learning is also a form of payment The rich dad asks the kids if they would work for free for him. By acting this way, he forces them to imagine a way to create their own source of income, one that is independent of their work for him.


For the children, inspiration came to them when they noticed that some comics were left lying around the shop. They recovered them and opened a library for their classmates, making them pay an entrance fee. Soon, they were making $9.50 per week, without having to worry about managing their library. Their first company had come into existence.


Assets, Liabilities, and Taxation

"The key to financial freedom and great wealth is a person’s ability or skill to convert earned income into passive income and/or portfolio income" - Robert T. Kiyosaki

The problem is not how to know how much you are earning, but how much you are able to put aside. Understanding the difference between assets and liabilities is crucial. An asset is a title or contract that allows its owner to generate income. A liability, on the other hand, is to generate expenditure. Poor people manage their money from day to day, the middle class buy liabilities thinking that they are acquiring assets, and the rich or future rich build a solid base of assets that generate their income.


The middle classes find themselves in a permanent state of constant financial struggle. Their primary source of income is their salary. And salary increases usually lead to tax increases. Concentrate your efforts on purchasing assets that generate a steady income. Keep your spending and your debts to a minimum.


Overall, Robert T. Kyosaki tries to make readers understand that the key element to successful financial stability is to learn how to invest in assets that will allow steady incomes, in other words, make money work for you, instead of working for money

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